eHealthInsurance.com Investor Relations – News Release

eHealth, Inc. Announces Preliminary Results for the Fourth Quarter and Fiscal Year 2017

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Jan. 16, 2018--
eHealth, Inc. (Nasdaq: EHTH), a leading private online health insurance
exchange in the United States, today announced preliminary financial
results and select key operating metrics for the fourth quarter and
fiscal year ended December 31, 2017. Revenue for the fourth quarter of
2017 is expected to be in the range of $39 million to $40 million. GAAP
net loss for the fourth quarter of 2017 is expected to be in the range
of $(23.5) million to $(22.5) million. Adjusted EBITDA for the fourth
quarter of 2017 is expected to be in the range of $(19.3) million to
$(18.3) million.

For the year ended December 31, 2017 eHealth anticipates revenue to be
in the range of $172.5 to $173.5 million as compared to the company’s
guidance of $165 to $175 million. eHealth anticipates GAAP net loss for
the year ended December 31, 2017 to be in the range of $(28.0) million
to $(27.0) million as compared to the company’s guidance of $(29.8) to
$(27.8) million. eHealth anticipates Adjusted EBITDA for the year ended
December 31, 2017 to be in the range of $(15.5) million to $(14.5)
million as compared to the company’s guidance of ($16.1) million to
($14.1) million.

Submitted applications for all Medicare products grew 16% during the
fourth quarter of 2017 compared to the fourth quarter a year ago. For
the full year 2017 submitted Medicare applications grew 10% compared to
2016.

Submitted applications for individual and family plan (IFP) products
declined 23% during the fourth quarter of 2017 compared to the fourth
quarter a year ago. For the full year 2017 submitted IFP applications
declined 51% compared to 2016. The decline in IFP submitted applications
was partially offset through eHealth’s strategy of offering non-ACA
compliant packages of health insurance benefits to address a broader
spectrum of consumer needs and income levels. During the fourth quarter
of 2017 there were approximately 7,200 submitted applications for
packages.

“We are pleased with our financial performance during the quarter and
for the full year 2017,” commented Scott Flanders, chief executive
officer of eHealth. “A return to financial and operating discipline
under the new leadership team has been an important goal for the company
as we have worked to transform the business during this transition year
for eHealth. In the important Medicare business unit, we posted 17%
application growth in the second half of the year, but fell short of our
targets for annual application growth in the ‘high teens.’ Our strategy
of focusing on strategic partnerships in addition to traditional
marketing efforts has resulted in meaningful progress in driving growth
on a more attractive cost basis, but the slower than expected roll-out
of selected partner relationships relative to plan caused us to fall
short of our submitted application objectives for the year.”

“The individual and family market remained challenged during the Open
Enrollment Period occurring during the fourth quarter,” continued
Flanders. “We saw an increase in submitted applications for qualified
health plans compared to the fourth quarter of 2016, driven in part by
the new Centers for Medicare and Medicaid Services enrollment framework
that allowed us to enroll subsidy-eligible customers into qualified
health plans through the Federal exchange without the customers having
to leave our website. At the same time, we experienced a decline in
non-subsidized plan applications as a result of premium inflation and
lack of inventory across the market, among other factors.”

These preliminary, unaudited results are based on management's initial
review of operations for the quarter ended December 31, 2017, and remain
subject to change based on management's ongoing review of the
fourth-quarter results. eHealth anticipates providing its full financial
and operating results for 2017, as well as financial guidance for 2018
and an update on its adoption of the new ASC 606 revenue recognition
standard, on or about March 1, 2018.

eHealth's preliminary results for the fourth quarter and full year ended
December 31, 2017 are based on information available as of January 16,
2018. These expectations are forward-looking statements and eHealth
assumes no obligation to update these statements. Results may be
materially different and are affected by the risk factors and
uncertainties identified in this release and in eHealth’s annual and
quarterly filings with the Securities and Exchange Commission.

About eHealth, Inc.

eHealth, Inc. (NASDAQ: EHTH) operates eHealth.com,
a leading private online health insurance exchange where individuals,
families and small businesses can compare health insurance products from
leading insurers side by side and purchase and enroll in coverage online
and over the phone. eHealth offers thousands of individual, family and
small business health plans underwritten by many of the nation's leading
health insurance companies. eHealth (through its subsidiaries) is
licensed to sell health insurance in all 50 states and the District of
Columbia. eHealth also offers educational resources, exceptional
telephonic support, and powerful online and pharmacy-based tools to help
Medicare beneficiaries navigate Medicare health insurance options,
choose the right plan and enroll in select plans online through
PlanPrescriber.com (www.PlanPrescriber.com),
eHealthMedicare.com (www.eHealthMedicare.com)
and Medicare.com (www.Medicare.com).

Non-GAAP Financial Information

This press release includes financial measures that are not in
accordance with generally accepted accounting principles in the United
States (GAAP), including Adjusted EBITDA. Adjusted EBITDA is calculated
by adding stock-based compensation expense, depreciation and
amortization expense, acquisition costs, amortization of intangible
assets, other income (expense), net and provision (benefit) for income
taxes to GAAP net income (loss).

eHealth believes that the presentation of these non-GAAP financial
measures provide important supplemental information to management and
investors regarding financial and business trends relating to eHealth’s
financial condition and results of operations. Management believes that
the use of these non-GAAP financial measures provides consistency and
comparability with eHealth’s past financial reports. Management also
believes that the items described above provide an additional measure of
eHealth’s operating results and facilitate comparisons of eHealth’s core
operating performance against prior periods and business model
objectives. This information is provided to investors in order to
facilitate additional analyses of past, present and future operating
performance and as a supplemental means to evaluate eHealth’s ongoing
operations. eHealth believes that these non-GAAP financial measures are
useful to investors in their assessment of eHealth’s operating
performance.

Adjusted EBITDA is not calculated in accordance with GAAP, and should be
considered supplemental to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. Non-GAAP
financial measures used in this press release have limitations in that
they do not reflect all of the revenue and costs associated with the
operations of eHealth’s business and do not reflect income tax as
determined in accordance with GAAP. As a result, you should not consider
these measures in isolation or as a substitute for analysis of eHealth’s
results as reported under GAAP. eHealth expects to continue to incur the
stock-based compensation costs and purchased intangible asset
amortization costs described above, and exclusion of these costs, and
their related income tax benefits, from non-GAAP financial measures
should not be construed as an inference that these costs are unusual or
infrequent. eHealth compensates for these limitations by prominently
disclosing GAAP net loss and providing investors with reconciliations
from eHealth’s GAAP operating results to the related non-GAAP financial
measures for the relevant periods.

Forward-Looking Statements

This press release contains statements that are forward-looking
statements as defined within the Private Securities Litigation Reform
Act of 1995. These include statements regarding our expected revenue,
Adjusted EBITDA and GAAP net loss for the fourth quarter of 2017, our
anticipated revenue, Adjusted EBITDA and GAAP net loss for the year
ended December 31, 2017, submitted applications for Medicare products
and IFP products for the fourth quarter and year ended December 31,
2017, our strategy of offering non-ACA compliant packages of health
insurance benefits, our goals to return to financial and operating
discipline, our target annual application growth of our Medicare
business, our strategy of focusing on strategic partnerships in addition
to traditional marketing efforts, our performance relative to plan,
progress in driving growth on a more attractive cost basis, and our
expectations to provide full financial and operating results for 2017
and guidance for 2018 in February 2018. These forward-looking statements
are inherently subject to various risks and uncertainties that could
cause actual results to differ materially from the statements made,
including risks associated with the impact of healthcare reform; our
ability to retain existing members and enroll a large number of new
members during the annual healthcare reform open enrollment period and
Medicare annual enrollment period; the impact of annual enrollment
period for the purchase of individual and family health insurance and
its timing on our recognition of revenue; our ability to sell qualified
health insurance plans to subsidy-eligible individuals and to enroll
subsidy eligible individuals through government-run health insurance
exchanges without users leaving our website for the upcoming open
enrollment period; our health insurance benefit packages' ability to
meet individual customer's specific health insurance and price needs;
our ability to comply with CMS guidance and impact on conversion rates
as a result of the federal exchange changes to enrollment; competition,
including competition from government-run health insurance exchanges;
seasonality of our business and the fluctuation of our operating
results; our ability to retain existing members and limit member
turnover; changes in consumer behaviors and their selection of
individual and family health insurance products, including the selection
of products for which we receive lower commissions; a reduction of
product offerings among carriers and the resulting impact on our
commission revenue; carriers exiting the market of selling individual
and family health insurance and the resulting impact on our supply and
commission revenue; our ability to execute on our growth strategy in the
Medicare and small business health insurance markets; the impact of
increased health insurance costs on demand; our ability to timely
receive and accurately predict the amount of commission payments from
health insurance carriers; timing of commission payments from health
insurance carriers; medical loss ratio requirements; delays in our
receipt of items required to recognize Medicare revenue; changes in
member conversion rates; our ability to accurately estimate membership;
our relationships with health insurance carriers; customer concentration
and consolidation of the health insurance industry; our success in
marketing and selling health insurance plans and our unit cost of
acquisition; our ability to hire, train and retain licensed health
insurance agents and other employees; the need for health insurance
carrier and regulatory approvals in connection with the marketing of
Medicare-related insurance products; costs of acquiring new members;
scalability of the Medicare business; lack of membership growth and
retention rates; consumers satisfaction of our service; changes in
competitive landscape; our ability to attract and to convert online
visitors into paying members; changes in products offered on our
ecommerce platform; changes and reductions in commission rates;
maintaining and enhancing our brand identity; our ability to derive
desired benefits from investments in our business, including membership
growth initiatives; dependence on acceptance of the Internet as a
marketplace for the purchase and sale of health insurance; reliance on
marketing partners; the impact of our direct-to-consumer television
marketing efforts; timing of receipt and accuracy of commission reports;
payment practices of health insurance carriers; dependence on our
operations in China; changes in laws and regulations, including in
connection with healthcare reform and/or with respect to the marketing
and sale of Medicare plans; compliance with insurance and other laws and
regulations; exposure to security risks; and the performance,
reliability and availability of our ecommerce platform and underlying
network infrastructure. Other factors that could cause operating,
financial and other results to differ are described in eHealth’s most
recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed
with the Securities and Exchange Commission and available on the
investor relations page of eHealth’s website at http://www.ehealthinsurance.com and
on the Securities and Exchange Commission’s website at www.sec.gov.
eHealth does not undertake any obligation to update any forward-looking
statement to conform the statement to actual results or changes in
expectations.